Keep your head above water

Don't let the delicious range at the Sydney Boat Show go to your head, David Lockwood.

Where else can you set foot aboard more than 175 truly luxurious new boats, ranging from an $80,000 eight-metre cabin cruiser to an $8 million 24-metre British sport yacht, lashed to a public marina that, were it configured differently, would let you walk on water from Cockle Bay to the Opera House?

And where else can you ogle more than 700 trailerboats and watercraft in 28,000 square metres of indoor exhibition space, snaking its way down carpeted aisles for 2.2 kilometres, inside a nautically inspired marine marketplace where everything from the latest whiz-bang electronics to bargain fishing gear is wheeled out for sale?

Such things are the preserve of the annual Sydney International Boat Show, the 46th edition of which will open its doors for the 25th consecutive year at Darling Harbour on August 1. A shrine to pleasure boating, it is regarded as the best place to compare apples with apples, drive a bargain and buy a new-season boat.

From the svelte Sunseeker Predator 84 down to the most affordable plastic paddle craft, the boat show doesn't so much question where to shop as what boat to buy. The potential for confusion amid the heaving fleet coveting a home in your backyard or nearest marina is real, especially when the sales pitches and once-in-a-show enticements get in your ear.

So, just two weeks out from the opening, we thought it an opportune time to share some boat-buying strategies. While the next new boat to be bought on a whim won't be the last, you really do need to arrive at the show with a game plan and a predetermined checklist. Begin with knowing your financial options.

While many boat brokers and dealers offer finance options, the effective interest rate won't compare with that from a bank or dedicated stand-alone institution, especially if you are prepared to draw down on your mortgage.

The good news is that interest rates are at historic lows, with fixed-rate loans for boat finance ranging from roughly 7.5 to 8 per cent. Mortgage rates are about 5 or 6 per cent - with fixed rates as low as 4.99 per cent - so borrowing against your house is the most cost-effective way to get cash, though you are limiting your ability to use the equity in your house for other things.

"Mortgage-based debt is much cheaper than traditional boat-loan debt. Let's say the home-loan rate is 6 per cent. That means that on 100K you will pay $6000 per annum or $500 per month," says Mark O'Donoghue from Finlease, who has spent more than two decades financing boats.

"Now let's look at a boat loan. The typical term is five years with a maximum balloon payment of 40 per cent. At a rate of 8 per cent, it will cost you $1500 per month compared with interest-only of $500 per month," he says. And you still have to pass the criteria to be an appropriate borrower.

"Dollar for dollar, it's easier to get money for a car. For a boat, the lending criteria include clean credit, clear ability to service debt, and there needs to be asset value and backing in case things go pear-shaped," he says.

O'Donoghue adds that lenders take the rather savage view that, should the worst eventuate and there's a fire sale, a boat will be worth just 50 per cent of its purchase price. "So we want to see a good deposit on the boat," he says.

You also need to budget for those recurring annual boat-ownership costs. These might include storage, be it a mooring, marina berth or dry stack somewhere; insurance; antifouling and slipping on bigger boats; engine and equipment servicing; general maintenance and detailing; and contingency charges. Lenders typically quantify this annual holding-cost expense as 10 per cent of the cost value of the boat (it's actually more like 7 per cent). Which is to say nothing regarding depreciation.

Getting cold feet? Buying a boat is a lifestyle choice that returns happiness dividends. Now the fun begins.

Shopping. The right boat is the one that satisfies the needs of everyone involved in the boating journey. Thumb through boating literature, surf websites, read the ads and boat tests, and get an idea of the kind of boat for you and your crew. Power or sail? Fishing or skiing? A cabin for overnighting or open decks for day boating? Aluminium or fibreglass? Two- or four-stroke outboard?

Whatever your budget and boating bent, there's a lot to be said for the KISS (keep it simple, stupid) principle. While specialised niche boats are to be found at the show, mainstream boat-builders have woken up to the fact that owners of boats demand all-inclusive, rather than preclusive, utilitarian craft these days. This has given rise to a new class of pleasure boat.

The trend is to bigger boats with all the comforts of home, easier boats to handle for the ageing population, dashing day boats for cruising in high style, and lifted fit and finish in keeping with other upmarket conveyances. At the same time, there are simpler boats with less maintenance, smaller boats that lessen the burden of boat ownership, fishing boats designed with one thing in mind, tow boats with hot graphics to lure the Y generation aboard. And yachts have become easier to sail and more luxurious to tempt motorboaters to the fold.

Make a shortlist of prospective boats, grab the brochures and URLs, and head back to the sanctuary of your home to compare specifications and whittle away the list to a few short-priced favourites. Sign on the dotted line only after a post-show sea trial, and after a self-imposed cooling-off period. But do lever off the competitiveness of all those sales folk doing deals under the one boat-show roof. At bare minimum you should be able to nail a good price and get some free kit thrown in.

If all that doesn't resonate with you then consider the latest boat-share and boating-club models. Sydney's biggest time-share club, Pacific Boating, now has 230 members across its three bases at Rose Bay, Cabarita and Pittwater. The membership fee to access one of its boats for a few weeks a year costs less than the boat's annual marina-berthing fee. And you get a walk on-walk off arrangement.

Details for the 43rd Sydney International Boat Show at sydneyboatshow.com.au.

David.lockwood@bigpond.com